SCM 309 exam 1 combined quizes

Product or customization flexibility

-Options offered -Built to your specifications

Core Competency

a harmonized combination of multiple resources and skills that distinguish a firm in the marketplace

Long-range: Aggregate Production Plan (APP)

usually covers a year or more, involves the construction of facilities & major equipment purchase

Postponement

a business strategy which maximizes possible benefit and minimizes risk by delaying further investment into a product or service until the last possible moment.

Organizational Strategy

a dynamic long-term plan that maps the route towards the realization of a company's goals and vision.

Blockchain

a growing list of records, called blocks, that are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data.

In making inventory decisions, the purpose of the basic Economic Order Quantity (EOQ) model is to: -minimize ordering costs -minimize customer dissatisfaction -minimize carrying costs -minimize the sum of the carrying costs and ordering costs.

-minimize the sum of the carrying costs and ordering costs.

Shigeo Shingo's 7 Types of Waste

1. Defects - Can cause additional waste 2. Overproduction - production used to mask shortcomings 3. Transportation - No value added, possible loss 4. Motion - Employees and machines 5. Waiting - Wasted resources during wait 6. Inventory - Not providing a return 7. Over-processing - More work than required for creating final product

When demand and supply planning are not synchronized (2 things)

1. Shortage of products that customers want 2. Surplus of products that customers do not want

Which of the following would refer to the 80/20 rule when applied to the ABC inventory control system? -80 percent of the unit cost accounts for 20 percent of the items -20 percent of the items account for 8- percent of the tasks -80 percent of the items account for 20 percent of the groups -80 percent of the total annual $ usage is accounted for, by 20 percent of the items

80 percent of the total annual $ usage is accounted for, by 20 percent of the items

Mass customization

Ability to make goods and services that global customers require at any volume and time Both product and volume flexibility

Chase Strategy

Adjusts capacity to match demand. Firm hires & lays off workers to match demand. Finished goods inventory remains constant. Works well for make-to-order firms.

An assumption of the basic Economic Order Quantity (EOQ) is: -Demand is unknown -Demand is variable -An item is produced continuously -An item is purchased in lots or batches

An item is purchased in lots or batches

Order qualifiers:

Basic customer expectations • Minimum performance level required to stay in business

Volume Flexibility

Coping with demand changes Large and/or small orders (timely)

Supplier selection criteria includes quantitative and aspects to be considered. Identity from the list below which one is a quantitative criterion:

Cost

Porter's Generic Strategies Model

Cost Leadership, Differentiation, or Focus.

MTS (Make to stock)

Customer order is picked from the Finished Goods inventory and delivered customer

MTO (Make to order)

Customer order triggers manufacturing of the product (time phased so that the promised customer delivery date can be met).

ETO (Engineer to order)

Customer order triggers order-specific engineering, after which the product is made according to order

You order a box of pencils from an office supply store and use them one-by-one until they are all gone. The pencils are: -Safety stock -Cycle stock -in transit stock -usage stock

Cycle stock

Operational Planning

Day-to-day mix

Corporate strategy

Defines businesses in which corporations participate and develop plans for

World class businesses have supply chains that are:

Demand driven, Agile, Collaborative

Independent demand is the: -Internal demand for all end-item parts and materials -absolute demand for all items -Forecasted demand for purchased items -Demand for a firm's end products

Demand for a firm's end products

Functions involved in demand and supply integration (4 things)

Financial Planning Demand Planning Supply Planning Inventory Planning

Competitive Advantage

Firm's ability to achieve market and financial superiority over its competitors

Order winners:

Goods and service features and performance characteristics that differentiate one customer benefit package from another • Help win the customers' business

Business strategy

Helps make decisions about the competitive priorities that SBUs need to pursue to gain competitive advantage

Enterprise Resource Planning (ERP)

Integrates internal operations with a common software platform and centralized database system.

vendor-managed inventory (VMI)

Inventory planning and replenishment system where supplier (vendor) accepts negotiated responsibilities that typically include monitoring and restocking using point-of-sale (POS) data.

Strategy is Dynamic:

It changes over time, most companies adapt strategy in the light of circumstances.

Tactical Planning

Level of volume output per time

Mixed Production Strategy

Maintains stable core workforce while using other short-term means, such as overtime, subcontracting & part time helpers to manage short-term demand.

Longest to shortest Order Penetration Point (OPP)

Make to stock (MTS) Assemble to order (ATO) Make to order (MTO) Engineer to order (ETO)

Strategic Planning

Match capabilities with marketing needs

Planning Principles

Maximize Customer Service Minimize operating costs Minimize inventory

ATO (Assemble to order)

Order is assembled based on order.

In terms of Supplier Segmentation, only some inputs are strategic resources. Using a Pareto Classification, __________ items should have 5-year contracts, 1 or 2 suppliers, and collaboration for joint designs.

Pareto Class A

Short-range: Materials Requirement Planning (MRP)

Plan covers few days to few weeks. Detailed planning process for components and parts to support the master production schedule

Intermediate: Master Production Schedule (MPS)

Plan spans six to eighteen months. Shows the quantity and timing of end items.

Level Strategy

Relies on a constant output rate while varying inventory & backlog according to fluctuating demand. Firm relies on fluctuating finished goods & backlogs to meet demand. Works well for make-to-stock firms.

Operations strategy

Set of decisions made across value chains that supports implementation of higher-level business strategies

Functional strategy

Set of decisions that each functional area develops to support its particular business strategy

Design Capacity

The maximum workload that an organization is capable of completing in a given period of time

Rough-Cut Capacity Plan (RCCP)

The medium-range capacity plan used to check the feasibility of the Master Production Schedule (MPS). Converts MPS from production needed to capacity required, then compares it to capacity available. Tactical decision

Capacity Requirements Planning (CRP)

The process of determining short-range capacity requirements.

Capacity Planning

The process of determining the operational capacity required to meet demand

scan-based trading

The process where suppliers maintain ownership of inventory at the retailer until items are scanned at the point of sale

The Delphi method used for forecasting

Uses a panel of experts, whose identities are typically kept confidential from one another, to respond to a sequence of questionnaires

Productivity Firm's perspective

What did I make? (Outputs) What was the cost? (Inputs)

Value Customer's Perspective

What do I get? What is the price?

Which of the following is true under the Periodic Review System? -it is more expensive to administer compared to the Continuous Review System -a lower level of safety stock is needed to buffer against uncertainty in demand over a longer planning horizon, compared to the EOQ system -the only uncertainty is the magnitude of demand during the delivery lead time -a higher level of safety stock is needed to buffer against uncertainty in demand over a longer planning horizon, compared to the EOQ system

a higher level of safety stock is needed to buffer against uncertainty in demand over a longer planning horizon, compared to the EOQ system

Bill of Materials (BOM)

a list of the raw materials, sub-assemblies, intermediate assemblies, sub- components, parts, and the quantities of each needed to manufacture an end product.

Resource Requirement Planning (RRP)

a long-range capacity planning module, checks whether aggregate resources are capable of satisfying the aggregate production. Resources considered include gross labor hours & machine hours

which of the following is true of the R-squared (R2) value in Excel's Trendline function?

as the value of R2 gets higher, the line will be a better fit for the data

In the linear trend equation, (formula) identity the term that signifies the trend

bt

The primary goal of Supplier Relationship Management is to

continuously improve performance

Competitive Priorities

cost, quality, time, flexibility, innovation

When demand and delivery lead time are known and constant, the recorder point is equal to: -safety stocks -economic order quantity -demand multiplied by the delivery lead -demand multiplied by the delivery lead time plus the safety stock

demand multiplied by the delivery lead

Which one of the following descriptions best defines the cycle service level as a measure of customer service? -the preferred proportion of annual demand instantaneously filled from stock -desired probability of not running out of stock in any one inventory cycle -the number of stockout tolerated per year -the preferred proportion of days in the year when an item is in stock

desired probability of not running out of stock in any one inventory cycle

Master Production Scheduling (MPS)

detailed disaggregation of the aggregate production plan, listing the exact end items to be produced by a specific period.

Distribution Requirements Planning (DRP)

determination of replenishment and positioning of finished goods in the distribution network

Scope

focus (offering its products to selected segments of the market) or industry-wide, offering its product across many market segments.

In linear regression output, the R-squared value _______ .

gives the proportion of variation in the dependent variable that is explained by independent variable

Standard residuals

help detect outliers that may bias the results of a regression analysis

Strategic Alliance utilized a ________ amount of resources and they should be used _______.

high; selectively

quantitative forecasts use mathematical techniques that are based on

historical data

Inaccurate forecasts can results in negative outcomes like

imbalances in supply and demand

Which of the following factors is (are) NOT included in the carrying cost? -cost of capital -obsolescence -inspecting incoming inventory -spoilage

inspecting incoming inventory

demand-supply integration (DSI)

integrates supply-management and demand-generating functions of a business

Time-series models may exhibit seasonal effects of cyclical effects. A seasonal effect differs from a cyclical effect in that a seasonal effect

is one that repeats that fits intervals of time, typically a year, month, week or day

What of the following is a disadvantage of carrying too much inventory? -it leads to higher annual inventory ordering costs -it leads to lower average finished goods inventories -it creates an unnecessary waste of scare resources -it increases the need to purchase items

it creates an unnecessary waste of scare resources

which of the following is true of linear functions used in predictive analytical models?

it is used when there is a steady decrease or increase over a range of a variable

Cost vs Differentiation Strategy

lower costs than its competition or differentiating itself along dimensions valued by customers to command a higher price

the process lifecycle

measure of the maturity of the manufacturing process.

the product lifecycle

measure of the maturity of the product or market

The Goal of capacity planning:

minimize the discrepancy between an organization's capacity and demand

Which of the following factors is (are) NOT included in the ordering cost? -obsolescence -purchasing department overhead costs -developing and sending purchase orders -bill paying

obsolescence

A(n) ______ is an extreme value that is different from the rest of the data

outlier

When there is not a lot of currently relevant data available it is generally best to use

qualitative forecasting

As the service level increases, -safety stock decreases at a decreasing rate -safety stock increases at a decreasing rate -safety stock decreases at an increasing rate -safety stock increases at an increasing rate

safety stock increases at an increasing rate

If the given time series has no trend and no seasonality, the most appropriate forecasting model to determine the forecast of the time series is the _______ model

single moving average

There are different types of Supplier Relationships. A Transactional Relationship is characterized by the following statements, EXCEPT

supplier base is small

Material Requirements Plan (MRP)

system of converting the end items from the master production schedule into a set of time-phased component part requirements

strategy

the approach by which an organization seeks to develop the capabilities required for achieving its competitive advantage

For the basic Economic Order Quantity (EOQ) model, which of the following relationship is NOT true? -Average cycle inventory level equals one-half the order size -the average dollar level of inventory equals unit price multiplied by order quantity -the optimal number of orders per year equals annual demand divided by the EOQ -At EOQ, annual ordering cost equal annual carrying cost

the average dollar level of inventory equals unit price multiplied by order quantity

Demand Planning

the combined process of forecasting and managing customer demands to create a planned pattern of demand that meets the firm's operational and financial goals

There are different types of Supplier Relationships. A Strategic Alliance Relationship is characterized by the following statements, EXCEPT

the duration of the relationship is short

Which of the following statements hold true for safety stock? -the lower the opportunity cost of the funds invested in inventory, the smaller the safety stock needed -the greater the uncertainty associated with forecasted demand, the lower the level of safety stock needed -the higher the profit margin per unit, the lower the safety stock necessary -the greater the risk of running out of stock, the larger the safety stock needed

the greater the risk of running out of stock, the larger the safety stock needed

Production Planning

the planning of production and manufacturing modules in a company or industry.

For a simple linear regression model, what does the Y intercept (80) represent?

the predicted value of Y when X = O

What does a multiple linear regression analyzed examine

the relationship between one dependent and more than one independent variables

Which one of the following is NOT a reason for firms to carry inventory? -to increase production/ setup costs -to meet variations in products demand -to allow for production scheduling flexibility -to take advantage of quantity discounts

to increase production/ setup costs

Product-Process matrix

tool to analyze the fit between a chosen product positioning and manufacturing process.

Random variations in a Time Series components are due to

unpredictable events

Radio Frequency Identification (RFID)

uses electronic tags and labels to identify objects wirelessly over short distances

Low prices can be achieved by:

• High productivity • High capacity utilization • Achieving economies of scale • Efficient design and operation of the supply chain • Improvement in quality

Goals of Corporations

• Sustainable long-term profits • Maximize Return on Investment (ROI)